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4.2 Marketing Planning
The elements of marketing plan A marketing plan is a detailed document about the marketing strategies used by an organisation in order to achieve their marketing goals. The marketing plan includes the following components: * Marketing objectives: Objectives that are SMART (Specific, Measurable, Achievable, Relevant, Time-specific) * Key strategic plans: Steps that provide an overview of how the marketing objectives will be achieved. * Detailed marketing actions: Information on specific marketing activities that are to be carried out * The marketing budget: The finance required to fund the marketing strategy The role of marketing planning Marketing planning is the process that involves the organisation's decision in which marketing strategy would be effective in achieving the corporates goals. To make this process easier, a detailed marketing plan is drawn. There are benefits and limitations of marketing planning. The benefits of the marketing planning include: * It helps identifying potential problems and seeking solutions for them. * Setting SMART objectives improves the chances of success of a firm's marketing strategy. * Sharing it with other business departments improves coordination and provides the whole organisation with a clearer picture or sense of where it is heading. * Planning a marketing budget ensures that resources are not wasted on unprofitable activities. * A clear plan could improve employees' motivation and inspire confidence in them about the organisation's future. The limitations of a marketing plan include: * They can become outdates if organisations are not quick to consider changes in market conditions. * The process may consume resources (time, expertise, money) in designing the plans. * Failure to prioritize marketing objectives may make it difficult for firms to tell whether they are meeting them. The four "Ps" of the marketing mix Central to market planning is the development of a firm's marketing mix. It includes the key elements of a marketing strategy that ensure the successful marketing of a product. * Product: Good or service that is offered in the market. * Price: Amount consumers are charged for a product. * Promotion: The various ways which consumers are informed about and persuaded to purchase a product. * Place: A product's location or channels of distribution used to get the product to the consumer. An appropriate marketing mix An appropriate marketing mix ensures that consumers needs and wants are adequately met. This requires businesses to produce the right product, charged at the right price, available at the right price and communicated through the right promotion channels. If the message of a marketing mix is not clear and focused, a firm could risk a loss in sales. To be effective in order to achieve its marketing objectives, an appropriate marketing mix will need to: * Be well coordinated so that the elements complement each other. * Be clear, focused, and not abstract or ambiguous. * Look into the degree of competition the product faces. * Consider the market it is aiming to sell the product to. * Target the right consumer Market segmentation, targeting and consumer profiles Market segmentation A segment refers to a sub group of consumers with similar characteristics in a given market. Market segmentation is the process of dividing the market into smaller or distinct groups of consumes in an effort to specifically meet their desired needs and wants, Markets are segmented in the following ways: * Demographic segmentation - this considers the varying characteristics of the human population in a market (age, gender, religion, family characteristics, ethnic grouping). * Geographic segmentation - this is where the market is divided into different geographical sectors (regions in a country where consumers reside, climatic conditions). * Psychographic segmentation - this divided the market based on people's lifestyle choices or personality characteristics (social and economic status, values). The advantages of segmentation Segmentation helps businesses identify existing gaps and new opportunities in domestic as well as international markets. Designing products for a specific group of consumers can increase sales and, through this, profitability. Segmentation minimizes waste of resources by businesses through identifying the right consumers for their products. By differentiating their products, businesses could diversify and spread their risks in the market and so increase market share. Market segmentation can be expensive in terms of research and development, production, and promotion as a firm attempts to reach a large segment of actual and potential customers. Targeting After segmenting its market, a firm must now decide on its target market. A target market consists of a group of consumers with common needs or wants that a business decides to serve or sell to. Targeting is therefore the process of marketing to a specific market segment and can be carried out using the following strategies. * Undifferentiated marketing - mass marketing, in this strategy a firm ignores the differences in the specific market segments and targets the entire market. * Differentiated marketing - segmented marketing, a strategy that targets several market segments and develops appropriate marketing mixes for each of these segments. * Concentrated marketing - niche marketing, a strategy that appeals to smaller and more specific market segments. = Consumer profiles Consumer profiles consists of information provided about the characteristics of consumers of a particular product in different markets, These characteristics include gender, age, social status, and income levels. It may also consist of details of the spending patterns in terms of the number and frequency of products bought by consumers. It is very important for firms to have knowledge on their consumers in order for segmentation and targeting to be successful. Positioning Product positioning involves analysing how consumers define or perceive a product compared to other products in the market. It helps consumers simplify their purchasing process as they categorize products and position them accordingly. An effective tool marketers use in planning their positioning strategies is a position or perception map. This is a visual representation of how consumers perceive a product in relation to other competing products. The importance of a position map * A position map could help a firm to establish which are its close competitors or threats in the market. * It also helps identify important gaps or opportunities in the market that the firm could fill by creating or offering new products. * It is a simple and quick way of presenting usually sophisticated research data. * It helps a firm in targeting specific market segments to best satisfy consumer needs and wants. The unique selling point or proposition (USP) This is a feature of a product that differentiates it from other competing products in the market. The differentiation is what makes a product unique and explains why a consumer chooses the product over another. The importance of having a USP A USP: * Helps establish a firm's competitive advantage in its product offering and, as a result, helps to attract more customers. * Leads to customer loyalty as customers can identify something special about the product in comparison to the rival products which increases sales. By using the elements of the marketing mix, businesses can differentiate themselves and their products from their rivals.